Websol Energy Systems Ltd has announced that a meeting of the Board of Directors of the Company will be held on December 30, 2009 to approve the allotment of Bonus Shares to the Members of the Company whose names appear on the Register of Members as on the Record Date.
The stock was trading at Rs.365, up by Rs.0.70 or 0.19%. The stock hit an intraday high of Rs.370 and low of Rs.360.10.
The total traded quantity was 4881 compared to 2 week average of 3629.
Friday, December 18, 2009
Jaiprakash Hydro-Power
With reference to the earlier announcement dated December 14, 2009 regarding (Sanction of Scheme of Amalgamation of Jaiprakash Power Ventures Ltd. with Jaiprakash Hydro Power Ltd), Jaiprakash Hydro Power Ltd has informed BSE that formal order dated December 14, 2009, has been received from Hon'ble High Court of Himachal Pradesh at Shimla and the same has been filed with the Registrar of Companies, Punjab, Himachal Pradesh & Chandigarh on December 14, 2009 making the Scheme of Amalgamation effective from December 14, 2009. Necessary formalities of change of name of the Company to Jaiprakash Power Ventures Ltd., in terms of the Scheme, are being carried out with the Registrar of Companies, Punjab, Himachal Pradesh & Chandigarh.
Saturday, December 5, 2009
SMS tariff war
The battle continues - will the customer win the war? The tariff war in the mobile telecom industry has now extended and shifted its focus to the Short Messaging Services (SMSes). Dual technology player Reliance Communications (RCom) has triggered a tariff war in the SMS segment. The company has launched two SMS plans which are available to both pre-paid and post paid users of the GSM and CDMA service.
SMSes under one plan will be charged at 1 paisa per SMS, but in order to avail of the same, users would have to pay a monthly fee of Rs 11. In another plan the users can avail of 15,000 SMSes free, by paying Re 1 per day as a fee. In other words it means 500 SMSes per day for a rupee charged; a great offer.
The above plans will be appealing to customers with high SMS usage – typically youth and professionals across India.
The tariff war is likely to continue till consolidation sets in the mobile telecom industry.
Since the mobile telecom industry is more voice driven, the move may not have too much impact on the industry. However, it will indeed be pro-customer as it will lead to increase in savings.
SMSes under one plan will be charged at 1 paisa per SMS, but in order to avail of the same, users would have to pay a monthly fee of Rs 11. In another plan the users can avail of 15,000 SMSes free, by paying Re 1 per day as a fee. In other words it means 500 SMSes per day for a rupee charged; a great offer.
The above plans will be appealing to customers with high SMS usage – typically youth and professionals across India.
The tariff war is likely to continue till consolidation sets in the mobile telecom industry.
Since the mobile telecom industry is more voice driven, the move may not have too much impact on the industry. However, it will indeed be pro-customer as it will lead to increase in savings.
IPO subscription to be made easy for HNIs & firms
From January 2010, HNIs and firms will be eligible to use the banking channel called Application Supported by Blocked Amount (ASBA) to buy stocks in the primary (IPO) market.
Under this channel, when an investor applies to an IPO, the funds do not immediately flow out from his account. The bank blocks the value of the shares applied for and the funds are not disbursed till the shares are allotted. Customers cannot use this money, since it is blocked.
Earlier in July 2008, SEBI allowed only retail investors to subscribe to IPOs through this channel, but capped the maximum amount of bid at Rs 1 lakh.
As a second phase, the channel will now be thrown open to a wider group of investors who will be able to make multiple applications at different prices within the price band of an IPO.
SEBI has asked banks to be ready with their software and to make necessary changes in their software.
We believe that the move will reduce the time taken between the public issue and listing. This will be in the interest of investors as it will make IPO subscriptions easy and ensure hassle-free transactions. Investors will no longer have to wait for the receipt of refund cheques.
Dubai debt trap
Dubai, which is seen as the global financial hub, got into a debt trap with Dubai World struggling with liabilities to the tune of USD 59 billion. The Dubai Government too hasn’t guaranteed the debt of Dubai World. As per a government statement, the company has received financing based on a project schedule basis and not on government guarantees.
This sent shock waves across the financial markets, significantly impacting stock prices across the globe. S&P too has cut the credit ratings of six Dubai government-linked companies, including ports operator DP World, to junk status. S&P also placed the ratings of four Dubai-based banks on negative outlook, due to their exposure to Dubai World.
This sent shock waves across the financial markets, significantly impacting stock prices across the globe. S&P too has cut the credit ratings of six Dubai government-linked companies, including ports operator DP World, to junk status. S&P also placed the ratings of four Dubai-based banks on negative outlook, due to their exposure to Dubai World.
Banning insurance commissions
The panel constituted last year, chaired by D Swarup, the Chairman of the Pension Fund Regulatory and Development Authority (PFRDA) presented its report to the Government. The panel was asked among other things:
- How to stop mis-selling of financial products
- How to raise financial literacy among citizens
With respect to the insurance industry, the panel has recommended in its report, that the up-front commissions embedded in the premium should be done away in a phased manner as under:
| Year | Commissions |
| 2009 | 15% |
| 2010 | 7% |
| 2011 | 0% |
The main intention of the panel is to stop mis-selling of products as agents and financial advisors often push financial products where they can earn more, without the investors in mind.
The move has been opposed by the Insurance Regulatory & Development Authority (IRDA) and Life Insurance Council, the industry lobby for the insurance sector.
We believe that if the recommendations to do away with insurance commissions go through government approvals, it will be in the interest of the investors.
Banking made easy?
PersonalFN Impact Indicator
In a move to make banking transactions more easy and convenient, the Reserve Bank of India (RBI) permitted banks to adopt the ‘Business Correspondents Model’ from Monday – November 30, 2009.
It means banks will now be able to appoint ‘Business Correspondents’ (BCs) enabling them (banks) to deepen the banking system. RBI has allowed entities like individual kirana/medical/fair price shop owners, PCO operators, agents of government-sponsored small savings schemes, insurance agents, petrol pumps owners and retired teachers to act as BCs of banks.
The principle for appointing such BCs are:
- Experience of these individuals in cash handling (cash inflow and outflow)
- Being residents of the area in which they propose to operate
According to RBI, the charges for services provided by the BCs, will be levied in a transparent manner and BCs will not be allowed to charge customers directly.
The model has evolved after experiencing limitations in the traditional ‘brick and mortar' banking model. As per RBI notification, the new model (Business Correspondents Model) will enable banks to accelerate their goal of financial inclusion.
However, we believe that though the move seems to make banking easier and convenient, there are some serious operational glitches like cash management, security and technology, which need to be considered for safe banking.
India's GDP beats forecast
The Gross Domestic Product (GDP) expanded during the second quarter (July – September) of the fiscal year 2010 by 7.9%. The key drivers for this strong figure are:
- Pickup in manufacturing sector
- Increased government expenditure
- Robust investments
- Lower interest rates
- Higher government salaries & pay commission arrears
- Increased incomes especially in the rural areas due to greater social spending and high farm goods prices
- Modest growth in farm output despite drought
In the first quarter (April – June) of the present fiscal year, the economy had expanded 6.1%. Interestingly now, the growth is close to the same level (i.e. 7.7%), of the second quarter (July – September 2008) of the fiscal year 2009, thus indicating that the economy is back on the health track. The stock market too has cheered this news during the week.
Given the attractive GDP numbers, we believe there are likely chances of:
- Government withdrawing stimulus – certainly beginning the phasing out over next few months
- RBI tightening interest rates soon
How to select a mutual fund?
Mutual funds offer the most convenient way of investing in equity, debt and money markets. The increased participation of Indian investors bears testimony to the fact that there is a widespread realisation of the same. Also over the years, the Indian mutual fund industry has grown manifolds, not only in terms of size but also in terms of offerings. While on one hand that is good; the increased number of offerings has also given rise to a state of dilemma in the mind of investors. They often get confused when it comes to selecting the right fund from the plethora of funds available. And even worse, many investors think that 'any' mutual fund can help them achieve their desired goals.
The fact is, not all funds are the same. There are various aspects within a fund that an investor must carefully consider before short-listing it for making investments. In this article we highlight some of those aspects.
- Performance: The past performance of a fund is important in analysing a mutual fund. However, one must remember that simply because a fund has performed well in the past does not mean that it will perform well in the future as well. It simply indicates the fund’s ability to clock returns across market conditions. And if the fund has a well-established track record, the likelihood of it performing well in the future is higher than a fund which has not performed well.
The following factors should be considered while evaluating a fund’s performance:
1) Comparisons: A fund’s performance in isolation does not indicate anything. Hence, it becomes crucial to compare the fund with its benchmark index and its peers, so as to deduce a meaningful inference. Again, one must be careful while selecting the peers for comparison. For instance, it doesn’t make sense comparing the performance of a midcap fund to that of a largecap.
‘Don’t compare apples with oranges’
2) Time period: It’s pertinent for investors to have a long term (atleast 3-5 years) horizon if they wish to invest in equity oriented funds. Hence, it becomes important for them to evaluate the long term performance of the funds. This does not imply that the short term performance be ignored. Performance over the short term should also be evaluated; however, the focus should be more on the long term performance. Besides, it is equally important to evaluate how a fund has performed over different market cycles (especially during the downturn). During a rally it is easy for a fund to deliver above-average returns; but the true measure of its performance is when it posts superior returns than its benchmark and peers during the downturn.
Choose a fund like you choose a wife – one that will stand by you in sickness and in health
3) Returns: Returns are obviously one of the important parameters that one must look at while evaluating a fund. But remember, although it is one of the most important, it is not the only parameter. Many investors simply invest in a fund because it has given higher returns. In our opinion, such an approach for making investments is flawed. In addition to the returns, investors must also look at the risk parameters, which in-turn explain how much risk the fund has taken to clock higher returns.
4) Risk: Risk is normally measured by Standard Deviation. It signifies the degree of risk the fund has exposed its investors to. Higher the Standard Deviation, higher the risk taken by the fund to clock returns. From an investor’s perspective, evaluating a fund on risk parameters is important because it will help them to check whether the fund’s risk profile is in line with their risk profile or not. For example, if two funds have delivered similar returns, then a prudent investor will invest in the fund which has taken less risk.
5) Risk-adjusted return: This is normally measured by Sharpe Ratio. It signifies how much return a fund has delivered vis-à-vis the risk taken. Higher the Sharpe Ratio, better is the fund’s performance. From an investor’s perspective it is important because they should choose a fund which has delivered higher risk-adjusted returns. Infact, this ratio tells us whether the high returns of a fund are attributed to good investment decisions, or to higher risk.
6) Portfolio Concentration: Funds that have a high concentration in particular stocks or sectors tend to be very risky and volatile. Hence, investors should invest in these funds only if they have a high risk appetite. Ideally, a well diversified fund should hold no more than 40% of its assets in its top 10 stock holdings.
Make sure your fund does not put all its eggs in one basket
7) Portfolio Churning: The portfolio turnover rate measures the frequency with which stocks are bought and sold. Higher the churning, higher the volatility. The fund might not be able to compensate the investors adequately for the higher risk taken.
Invest in funds with a low turnover rate
- Fund Management: The performance of a mutual fund scheme is largely linked to the Fund Manager and his team. Hence, it’s important that the team managing the fund should have considerable experience in dealing with market ups and downs. Also, investors should avoid fund’s that owe their performance to a ‘star’ fund manager. Even if the fund manager is present today, he might quit tomorrow, and then the fund will be unable to deliver its ‘star’ performance without its ‘star’ fund manager. Therefore, the focus should be on the fund houses which are strong in their systems and processes.
Fund house should be process-driven and not 'star' fund-manager driven
- Costs: If two funds are similar in most contexts, it might not be worth buying the high cost fund if it is only marginally better than the other. Simply put, there is no reason for an AMC to incur higher costs, other than its desire to have higher margins.
The two main costs incurred are:
1) Expense Ratio: Annual expenses involved in running the mutual fund include administrative costs, management salary, overheads etc. Expense Ratio is the percentage of assets that go towards these expenses. Every time the fund manager churns his portfolio, he pays a brokerage fee, which is ultimately borne by investors in the form of an Expense Ratio. Therefore, higher churning not only leads to higher risk but also higher cost for the investor.
2) Exit Load: Due to SEBI’s recent ban on entry loads, investors now have only exit loads to worry about. An exit load is charged to investors when they sell units of a mutual fund within a particular tenure; most funds charge if the units are sold before a year. As exit load is a fraction of the NAV, it eats into your investment.
Try investing in a fund with a low expense ratio and stay invested in them for longer duration.
Among the factors listed above, while few can be easily gauged by investors, there are others on which information is not widely available in public domain. This makes analysis of a fund difficult for investors and this is where the importance of taking the help of a mutual fund advisor comes into fore. At Personal FN, we spend a lot of time and effort in short-listing funds which are best for investors, by using various qualitative and quantitative techniques.
Wednesday, October 28, 2009
RedChip Companies Announces Its 2009 Top-Performing Stocks
ORLANDO, Fla., Oct. 26, 2009 (GLOBE NEWSWIRE) -- RedChip Companies, Inc. (http://www.RedChip.com) today announced its top-performing stocks for 2009: L&L International Holdings, Inc.; China Education Alliance, Inc.; India Globalization Capital, Inc.; Longwei Petroleum Investment Holding Ltd.; China Wind Systems, Inc.; China Gengsheng Minerals, Inc.; Alter NRG Corp.; ZAGG Inc.; Aethlon Medical, Inc.; and Royal Standard Minerals Inc. RedChip is an international financial relations and research firm servicing public companies with market caps up to $1 billion. The stock's performance is based on the price of the stock on the date the company engaged RedChip's services.
-- China Education Alliance (NYSE Amex:CEU), a company offering high-quality online and onsite educational and vocational services for student and adults in China, is up 79% post-coverage, moving from $3.20 on May 25, 2009 to $5.74 at market close on October 23, 2009. Average daily volume has increased 2,252% from the month prior to coverage to 335,487 average daily shares traded in the current 30-day period.
-- Longwei Petroleum (OTCBB:LPIH), a profitable diesel, gasoline, fuel oil, and solvent oil distributor operating in China's Shanxi Province, is up 636% post-coverage, moving from $0.28 on April 8, 2009 to $2.06 at market close on October 23, 2009. Average daily volume has increased 998% from the month prior to coverage to 409,447 average daily shares traded in the current 30-day period.
-- L&L International Holding (OTCBB:LLFH), a U.S. publicly traded energy company operating profitable coal mines in China's resource-rich Yunnan Province, is up 515% post-coverage, moving from $0.97 on April 14, 2009 to $5.79 at market close on October 23, 2009. Average daily volume has increased 11,517% from the month prior to coverage to 109,317 average daily shares traded in the current 30-day period.
-- India Globalization Capital (NYSE Amex:IGC), a company developing infrastructure in India and focusing on materials and iron ore production, is up 43% post-coverage, moving from $1.29 on August 19, 2009 to $1.85 at market close on October 23, 2009. Average daily volume has increased 462% from the month prior to coverage to 910,184 average daily shares traded in the current 30-day period.
-- China Wind Systems (OTCBB:CHWY), a China-based manufacturer of rolled rings and other forged products serving wind turbine manufacturers, is up 21% post-coverage, moving from $4.23 (split-adjusted) on August 31, 2009 to $5.10 at market close on October 22, 2009. Average daily volume has increased 64% from the month prior to coverage to 108,795 average daily shares traded in the current 30-day period.
-- China Gengsheng Minerals (OTCBB:CHGS), a China-based manufacturer of mineral-based, heat-resistant and energy-saving monolithic refractories, functional ceramics, fracture proppants and fine-precision abrasives for such industries as steel, oil and solar energy, is up 119% post-coverage, moving from $0.80 on August 31, 2009 to $1.75 at market close on October 23, 2009. Average daily volume has increased 2,894% from the month prior to coverage to 103,524 average daily shares traded in the current 30-day period.
-- ZAGG (OTCBB:ZAGG), a producer of mobile electronics and audio accessories including the patented gadget protector invisibleSHIELD(TM), is up 193% post-coverage, moving from $2.05 on April 3, 2009 to $6.01 at market close on October 23, 2009. Average daily volume has increased 29% from the month prior to coverage to 186,847 average daily shares traded in the current 30-day period.
-- Alter NRG Corporation (TSX: NRG) (Other OTC:ANRGF), an emerging clean, alternative energy company who provides technology and services to facilitate the gasification of coal, household and industrial waste and biomass to produce ethanol and power, is up 163% post-coverage, moving from $0.97 on May 22, 2009 to $2.55 at market close on October 23, 2009. Average daily volume has increased 344% from the month prior to coverage to 14,833 average daily shares traded in the current 30-day period.
-- Aethlon Medical, Inc. (OTCBB:AEMD), a creator and manufacturer of diagnostic and therapeutic filtration devices used to treat infectious diseases and cancer, is up 220% post-coverage, moving from $0.20 on April 3, 2009 to $0.64 at market close on October 23, 2009. Average daily volume has increased 325% from the month prior to coverage to 461,441 average daily shares traded in the current 30-day period.
-- Royal Standard Minerals Inc. (OTCBB:RYSMF), an advanced-stage mining company, is up 121% post-coverage, moving from $0.061 on September 28, 2009 to $0.135 at market close on October 23, 2009. Average daily volume has increased 24% from the month prior to coverage to 186,102 average daily shares traded in the current 30-day period.
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